Thursday, 25 October 2007

More on integration in HCM

In my previous post, I noted that integrated HCM systems like Authoria can go some way towards helping organisations create value through their people.

But more is needed.

This is my view about what.

Firstly, an organisation need a clear HCM strategy that focuses on developing a particular organisational capability (human, organisation and / or social capital). This capability needs to be something that will make a difference for the particular organisation at a particular, although relatively long-term point in its development.

Secondly, the organisation needs to identify the sort of people who will be key to providing this organisational capability, and thirdly, it needs to focus its management and HR processes on a) creating this capability, and b) appealing to the group of people it is targeting (ie becoming an employer of choice for the people it chooses). Doing this is likely to result in best fit vs best practice HR processes.

Once these processes have been identified, the organisation can then review what technologies will best enable and integrate these best fit requirements.

Some of Tod's examples got quite close to this. For example, Hess requires quality decisions on oil to be made by some of the best petroleum engineers. This is difficult because less people are graduating in petroleum engineering, and particularly because Hess finds it difficult to attract engineers to its location when it is competing against organisations with very strong employer brands / propositions like Google. So it needs to retain the engineers it has.

HCM strategy = people who will make the best decisions about oil
People = sufficient petroleum engineers
HR processes = retaining these people.

But this is still a fairly traditional type of approach / level of value, so I would say the example relates to HRM vs HCM. Hess is only going to create value through its people if it finds a way to differentiate the organisation through its people, rather than simply dealing with problems in executing its business strategy.

I was talking about this at a session run by Infobasis last week. I was challenged that my views on organisational capability / HCM are pretty much common sense (I guess that this is actually a fairly good thing!). I responded that yes, that this is probably the case, apart from the identification of the organisational capability itself. This is where the real art in HCM strategy development lies: what is it that is going to enable an organisation to create value through its people?

And, despite some of my recent posts, I'm not against measurement in HCM. I just think it's important to recognise that answering the question above lies in taking an emotional leap into the unknown, rather than rational analysis of data.